Ascena Q2 net loss widens, comparable sales drop 2 percent

Ascena Retail Group, inc. reported net sales for the second quarter of 1,217 million dollars compared to 1,271 million dollars in the year-ago period, reflecting a comparable sales decrease of 2 percent, a decline in other revenue and a decrease in non-comparable sales. Gross margin decreased to 635 million dollars from 660 million dollars, while gross margin rate improved to 52.2 percent compared to 51.9 percent of sales in the year-ago period. The company reported a net loss from continuing operations of 132 million dollars or 13.22 dollars per diluted share compared to 81 million dollars or 8.20 dollars per diluted share, in the year-ago period.

Commenting on the second quarter trading update, Gary Muto, Chief Executive Officer of Ascena said: “For the second quarter, we are pleased to have exceeded our adjusted operating income expectations for the third consecutive quarter, resulting from better gross margin performance and continued cost reduction efforts. We are confident that the work we are doing now sets us up to provide consistent profitable performance and enhance shareholder value over the longer term.”

Not taking into account potential impacts from the coronavirus situation, Ascena said, for the third quarter, net sales are expected to range between 1.050 to 1.080 billion dollars; comparable sales of negative low single digits; gross margin rate of 57.8 percent to 58.3 percent; and adjusted operating loss of 10 million dollars to 30 million dollars.